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Brexit – Questions and answers

Please find below general queries about Brexit and its effect on investments.

1.    What are you doing to plan for Brexit?

We are looking into what the implications could be for all our customers, so that we are well prepared to ensure the best outcomes. As soon as the Brexit outcome becomes more certain we will be in a position to tell you and your clients whether and how you both could be affected, and what solutions are available.

2.    What will happen to my client’s policy on Day 1 post Brexit?

Unless we contact you directly, and inform you otherwise, nothing will happen. The value of their investment is driven by market values. You may want to review their current asset allocation in preparation for Brexit.

3.    What are you doing to protect customers against the potential of scams and fraud?

We continue to monitor fraud trends proactively and engage with clients and advisers to educate and improve anti-fraud systems and controls. In doing so, we aim to protect our customers from risks of scams or other frauds. You can also visit the FCA website for more information https://www.fca.org.uk/scamsmart

4.   What negative effect could Brexit have on my client’s investments?

All investments can go up and down in value over time and returns are not guaranteed. One issue that can cause value to fall is market sentiment. If lots of people worry about the outcome and start to sell their investments then values could fall. For the most part though, the basic principles of long-term investing remain the same – short-term falls do not necessarily impact on long-term goals.

5.    What does leaving the EU mean to investors in the UK in terms of holding EU-domiciled funds?

There may be a loss of tax advantages for EU-based UCITS funds. UCITS stands for Undertakings for Collective Investment in Transferable Securities, and funds with UCITS status are regulated at EU level. If this affects any funds your clients are invested in, we will contact you and your clients to explain the options available.

6.    What happens if markets do take a downturn as some have predicted – what will be the short- and long-term implications for my client’s investment?

Nobody knows how investment markets could be affected by Brexit and what the implications will be. However, it’s important to remember that most investments should be seen as a medium- to long-term commitment.

7.    How can I monitor the impact that Brexit is having on my client’s investments?

You can check the value of their investments using our online services. If you would like more information about our online services, or to find out how to register for them, please contact us.

8.    What support will Old Mutual International be providing for advisers to help inform clients in the weeks and months to come?

We are looking into what the implications could be for all advisers and their clients, so that we are well prepared to ensure the best outcomes. As soon as the Brexit outcome becomes more certain, we will be in a position to provide material for advisers to use with their clients. In the meantime, we will keep you updated via our website and provide as much information and reassurance as possible.

9.    What information are you providing to my clients if they call you directly about Brexit?

We are reminding all clients of the importance of speaking to their financial adviser or fund adviser before making any investment decisions. Although the outcome and implications of Brexit are not yet fully known, we are working to provide as much reassurance as possible that nothing has yet changed and that their investments with us are secure.

10.    Am I correct that the transition period will happen regardless of a No Deal or Deal Brexit?

This is still dependent on the ongoing negotiation between the UK and EU.

11.    How is the Isle of Man affected by Brexit?

The Isle of Man is not in the EU or part of the UK.

Please refer to the extract from IOM Government website – https://www.gov.im/about-the-government/departments/cabinet-office/brexit-what-next-for-the-isle-of-man/technical-notices/

The UK’s Notice in the link above explains that in the event of a no deal scenario, the UK will essentially lose member state access rights for financial services and fall back on regulatory equivalence measures and special arrangements to seek to maintain two way financial business as far as possible with the EU.

It confirms domestic financial services will largely remain unaffected.

As explained in the Notice in the link above, the Isle of Man is already a third country for financial services business with the EU and has become a successful international finance centre.

Consequently, the Isle of Man has only limited dependence on the EU for financial business compared with the UK.

The Isle of Man’s regulatory framework is also built around broader international standards rather than mirroring the EU and we have no legal implications that arise from a no-deal situation.

Consequently, apart from the adviser passport permission issue highlighted above, there are no further specific consequences of a no deal Brexit identifiable from the UK’s published Notice for the Isle of Man other than the macro risk that a downturn in the UK economy through reduction in their financial services industry could lead to an element of downturn in the Isle of Man’s, given the links between our economies.

PEACE OF MIND

At times like this, it can sometimes be worthwhile to stand back and think about the principles and safeguards you can rely on – no matter what is happening in the short term – especially the importance of taking expert financial advice.

The following links provide information and commentary for you to use with your clients.

Investing in volatile times

Our guide to ‘investing in volatile times’ is a useful reminder of the seven essential investment principles to help reach investment goals.

Expert Opinion

Brexit: The week that was… – In the wake of the overwhelming defeat of Theresa May’s Brexit deal on Tuesday, the UK government is now engaged in “cross party talks” to find a new solution with plans to unveil the next steps on Monday 21 January 2019. Following these historic events, the team at Quilter Investors highlights their thoughts on the effects that Brexit week has had on markets and investors.

In November 2018, Anthony Gillham, Head of investments and portfolio manager at Quilter Investors, gave his view on what Brexit uncertainty might mean for investors. Find out more here.

Quilter Investors 2019 market outlook – Our sister company, Quilter Investors, recaps key market events of the past year and highlights themes and trends to take into consideration in 2019.

Global partners 2019 market outlook – For a more holistic picture of what 2019 may hold for investors, we invited our Global Partners to provide a viewpoint on their market outlook across different asset classes.

Investor Protection

As an adviser to an offshore investor, you can rest assured that all the offshore centres we work from are well regulated and secure. The more financially secure and established a company, the less chance there is of it being unable to meet its financial liabilities.

In the unlikely event that a life company becomes insolvent, investor protection schemes can act as a safety net for policyholders, allowing them to claim compensation. The availability and rules governing such schemes and specific rights for each policyholder vary from one jurisdiction to another.

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